‘State subsidising below-cost alcohol’

THE State is subsidising supermarkets in selling cheap alcohol by refunding them VAT on drink sold at a loss, it emerged at an Oireachtas Committee yesterday.

The chairman of the Health Committee Jerry Buttimer said the issue needed to be addressed “immediately” as it “flew in the face” of Government policy.

The National Off Licence Association (NoffLA) told members supermarkets were able to reclaim VAT on losses incurred on alcohol sold below cost price.

Chairperson Evelyn Jones said any alcohol sold below cost price gets a VAT refund of 21% of the loss in a rebate from the Government.

Reacting, Mr Buttimer, Fine Gael TD for Cork South Central, said: “This can be put another way, the Government, the taxpayers are in effect subsidising those large retailers who can afford to sell alcohol below cost price. This cannot be permitted to continue.”

Questioned by deputies about the delivery service operated by some off licences, NOffLA spokesman Jim McCabe said they had warned members it was “illegal” to accept cash on delivery and that sale by credit card was also “strictly speaking illegal”.

Fionnuala Sheehan of MEAS (Mature Enjoyment of Alcohol in Society), an awareness body funded by the alcohol industry, said “thorough research” should be carried out before introducing minimum pricing.

Labour TD for Dublin Mid West Robert Dowds accused MEAS of being a “smoke screen” for the harm caused by drinking.